Bloomberg News

Poor Students at Risk as Supercommittee Weighs $3.5 Billion Cut

September 29, 2011

Sept. 29 (Bloomberg) -- Debbie Hunter, principal of Edward E. Taylor Elementary in Columbia, South Carolina, says federal spending cuts may reverse gains at her school where 99 percent of 257 students are so poor they qualify for free or reduced- price lunches.

“We have to be real mindful that the kids we are educating now are the people who are going to be running the country one day,” Hunter, 53, said in a telephone interview. “Funding cuts tell students that education isn’t important.”

The worst-case scenario: $3.5 billion in education spending reductions that will happen automatically if members of a deficit-targeting supercommittee can’t agree on an alternative, said Joel Packer, executive director at the Committee for Education Funding in Washington. That would be the biggest one- time cut ever in federal school programs, he said.

The supercommittee’s deliberations are likely to harm the poor disproportionately, who are more reliant on federal dollars, Hunter and other educators say.

The automatic cuts that would follow deadlock include a $1.1 billion, or 7.8 percent, reduction in Title 1 funding, which helps schools with large populations of low-income students by providing extra support. School districts with substantial poor populations are “significantly more vulnerable to federal action,” Fitch Ratings said in a Sept. 21 report.

Hit ‘Inevitable’

Regardless of the outcome, reduction of education spending is inevitable, said Trey Grayson, director of the Institute of Politics at Harvard University’s John F. Kennedy School of Government in Cambridge, Massachusetts. That’s because unlike Medicare, Medicaid and Social Security, school spending is discretionary, he said.

“Education funding will likely be hit no matter what, if they come to a decision or they don’t,” said Grayson, who served as Kentucky’s secretary of state from 2003 until this year.

The threat to Title 1 funding is especially acute in South Carolina, where per-pupil spending has dropped by 24 percent since 2008, the steepest of any state in a report by the Center on Budget and Policy Priorities, a Washington-based research organization.

At Hunter’s school in the state’s capital, Title 1 dollars have prevented the elimination of four teaching positions since 2008. They’ve also meant that pre-kindergarten lasts all day instead of just half -- a proven way to bolster student performance later in life -- and also allowed her to offer programs to boost parental involvement and provide additional teacher training, she said.

‘No Meaningful Effect’

Not everyone agrees that less money for schools equates to lower achievement. For Neal McCluskey, an education analyst at the Cato Institute, which advocates for limited government and market-based reform in education, federal cuts will have “no meaningful effect” on academic outcomes.

Federal staffing data show that as the ratio of school district employees to students fell to one worker for every 7.8 pupils in 2008, from 13.6 in 1969, as national achievement scores for 17-year-olds remained stagnant, he said.

“There is no educational justification for protecting education from absolutely necessary spending cuts,” McCluskey said in a telephone interview from Washington. “We’ve been piling billion of dollars into a system that doesn’t produce the results we want, and it’d be more efficient to let taxpayers keep that money.”

Stimulus Evaporating

Any cuts will worsen the impact of the evaporation of federal stimulus money, which helped soften state budget cuts when the recession sent tax revenue plummeting, educators say.

Twenty-one states, out of 24 for which data is available, are providing less per-student funding to local school districts for kindergarten through 12th-grade education this year than last, while 17 are providing less than before the recession began, according to the Center on Budget report. State funds make up about 47 percent of the nation’s total education expenditures, the center said.

Governors recommended cutting K-12 funding by $2.5 billion and higher education by $5 billion more in 2012, after slicing $1.8 billion and $1.2 billion, respectively, in 2011, according to the National Association of State Budget Officers.

“Even the most optimistic predictions don’t see funding levels getting up to pre-recession levels before the end of the decade,” said Jim Hull, senior policy analyst at the National School Boards Association in Alexandria, Virginia. “The combination of lower property values and reductions in state funding has really put the squeeze on our public schools.”

Counteracting Cuts

Budget records over the past 40 years show state school funding has never dropped as much as it has since 2008, Hull said. That highlights the critical role federal funds have played in helping to counteract state cuts, he said. More federal aid is needed to stem the blood flow, not less, he said.

Only about $2 billion remains of the $39 billion in education aid provided by the federal government in state fiscal stabilization funds in 2009, while states have used up about $6 billion of the $10 billion allocated by the Education Jobs Fund that Congress enacted last year, the Center on Budget said. Both were intended to help avert job reductions in K-12 and higher education.

School districts cut 293,000 jobs in the three years that ended in August, according to federal employment data cited by the center.

“These job losses have reduced the purchasing power of workers’ families, in turn reducing overall consumption in the economy and thus extending the recession and slowing the pace of recovery,” according to the Center on Budget.

More Firings

Additional federal funding cuts to education by the deficit supercommittee will mean more firings, said Jackie B. Hicks, president of the South Carolina Education Association, the state affiliate of the National Education Association. Reduced funding also risks driving up dropout rates, Hicks said.

Only 3 cents of every federal dollar spent goes to education, said Meredith Bagby, founder of the American Education Foundation, a nonprofit focused on youth engagement in politics and the publisher of The Annual Report of the United States of America, which tracks federal spending.

“The budget will not be balanced by education,” she said by telephone. “We could dismantle all federal funding to education and we would come nowhere close to balancing the budget.”

--Editors: Jeffrey Taylor, Pete Young

To contact the reporter on this story: Esmé E. Deprez in New York at edeprez@bloomberg.net;

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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